[Winning Trade] SMIC Rally: One Tiger Made HKD 205K
Chinese chip stocks are heating up again. On May 26, $SMIC(00981)$ jumped 5.7% One Tiger caught the move early and made HKD 200,000 from a bullish trade on SMIC
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Congrats to @Bernardcpy for buying the dip in $SMIC(00981)$ and turning it into HKD 205,495
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Congrats to@ @Loyster for buying the dip in $SMIC(00981)$ and turning it into HKD 129,039
So why is SMIC moving?
The simple answer: AI needs chips, and China wants more of homegrown chips. SMIC is China’s leading chip foundry. It does not design chips like $NVIDIA(NVDA)$ . It manufactures chips for customers, similar to what $Taiwan Semiconductor Manufacturing(TSM)$ does globally.
That makes SMIC one of the key names investors watch when China’s semiconductor supply chain gets hot.The latest catalyst came from China’s push to support domestic AI chips and computing power. As AI demand grows, investors are betting that local chipmakers and foundries could benefit.
SMIC’s numbers are also improving. In Q1, revenue rose 11.5% year-over-year to US$2.505 billion. Net profit grew 5.0% year-over-year and 14.2% quarter-over-quarter to US$197 million.
More importantly, the company expects Q2 revenue to grow 14% to 16% from the previous quarter, with gross margin guided at 20% to 22%.
Its factories are also busy. SMIC’s capacity utilization stayed high at 93.1% in Q1, a key sign of solid demand for a foundry business.
Another driver is SMIC’s acquisition of the remaining 49% stake in SMIC North. The deal makes SMIC North a wholly owned subsidiary and is expected to lift SMIC’s net profit and earnings per share.
Of course, risks remain. Semiconductors are cyclical, SMIC still trails global leaders like TSMC in advanced technology, and the stock has already moved sharply.
But the bigger story is clear: if China keeps pushing for chip self-sufficiency and AI demand keeps growing, SMIC remains one of the most important stocks in China’s semiconductor supply chain.
Now the big question is:
What do you think about SMIC? Is this the start of a new China semiconductor cycle, or has the stock already run too far? $SMIC(00981)$
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